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The bill for the U.S.-China trade fight is coming due, U.K. Prime Minister Theresa May is out, and one-quarter of Americans say they don't have any retirement savings. Good morning. Jeff Sparshott here to take you through key developments in the global economy. Send us your questions, comments and suggestions by replying to this email.

Farm Aid II

President Trump said a trade deal with China was a “good possibility.” In the meantime, the White House rolled out a $16 billion plan to help farmershit by the conflict, Josh Zumbrun and William Mauldin report.

The agriculture plan largely consists of direct payments to U.S. farmers, echoing a $12 billion program from last year. Prices for commodities such as soybeans, corn and sorghum fell last week to their lowest level in more than 10 years.

Businesses stung by the fight are hoping Mr. Trump and President Xi Jinping of China can rekindle talks at a Group of 20 meeting in late June. Mr. Trump suggested that Huawei Technologies could potentially be a bargaining chip in settling the dispute.

But Mr. Xi has indicated that China is digging in, warning the country of hardships akin to Mao Zedong’s “Long March.”

WHAT TO WATCH TODAY

U.S. durable-goods orders for April are expected to fall 2.0% from a month earlier. (8:30 a.m. ET)

The Baker-Hughes rig count is out at 1 p.m. ET.

President Trump departs for a four-day trip to Tokyo. While the official highlight of the visit is a meeting with newly crowned Emperor Naruhito, businesses are watching for any developments on trade.

TOP STORIES

The End of May

Theresa May said she would quit as British prime minister after failing repeatedly to win parliamentary backing for the Brexit divorce agreement she negotiated with the European Union, Max Colchester reports.

Mrs. May said she would step down as Conservative leader on June 7, but stay as on as prime minister until her successor had been chosen.

The decision formally sets off a race to succeed her, one likely to be won by a supporter of a sharper break from the EU than that embodied in Mrs. May’s deal.

Among the questions that loom large for the next prime minister will be whether to push for an exit from the bloc on Oct. 31 without a deal and whether to attempt to break a log jam in Parliament by calling a general election.

Tariff Tax: $831 Per Household

The Trump administration’s latest increase in tariffs on Chinese imports is costing the average U.S. household $831 a year through higher prices and reduced economic efficiency, according to a paper published by the Federal Reserve Bank of New York. First, consumers are paying more. Next, the U.S. economy stands to take a hit as companies buy more from suppliers outside China—paying higher prices but also avoiding tariffs, William Mauldin reports. “These higher tariffs are likely to create large economic distortions and reduce U.S. tariff revenues,” economists Mary Amiti, Stephen Redding and David Weinstein wrote in the report.

Switcheroo

Here’s a quick chart showing how U.S. trade patterns have changed since mid-2018, when President Trump said he’d impose 25% tariffs on $50 billion in Chinese goods. Imports from China are down $16 billion, while imports from the rest of the world are up $16 billion.

Should We Be Worried?

The latest surveys on manufacturing- and service-sector activity show the eurozone economy is stagnating—that's not a big surprise. But the same measure for the U.S. plunged in May, suggesting American business confidence is faltering and the economy is decelerating much more than expected. IHS Markit's U.S. index for manufacturing dropped to the lowest level since September 2009 and the measure for services to the lowest level since March 2016. "Worse may be to come, as inflows of new business showed the smallest rise seen this side of the global financial crisis," said IHS economist Chris Williamson.

One-quarter of working individuals say they have no retirement savings at all, according to a Federal Reserve survey. Among younger workers, aged 18 to 29, 42% have nothing set aside.

And almost 40% of Americans said they don’t have enough cash on hand to cover an unexpected $400 expense.

Americans could see the most significant changes in more than a decade to their retirement plans under legislation the House of Representatives passed Thursday, with measures designed to make it easier for employers to offer 401(k)-type accounts and for participants to convert their balances into a steady lifetime income.

What We're Following

President Trump is expected to release an executive order as early as next week to mandate the disclosure of prices in the health-care industry. The White House has been working for months on a strategy officials believe will lower health-care costs by giving consumers and employers data for the first time on the discounted and negotiated rates between insurers, hospitals, doctors and other providers.

Should parents charge rent? More than one-third of young adults—those between ages 18 and 34—lived at home in 2015, up from 26% in 2005. Many parents don’t charge rent to their returning progeny, but some financial experts say they should pay their share of the real estate—to teach kids how to budget and how to prepare for life.

U.S. new-home sales in April posted their largest monthly drop since the end of last year. But there could be some good news in the details: March figures were revised up and sales grew robustly in February and January.

TWEET OF THE DAY

3. The prospect of an even more hardline Brexiteer now becoming PM and threatening a no deal exit is deeply concerning. Added to the experience of the past three years, this makes it all the more important that Scotland is given the choice of becoming an independent country.

What is China’s president really thinking? "I don’t believe some of this rhetoric that you’re seeing out of China, saying that we’re prepared to suffer great economic hardship or to continue this economic fight with the U.S. I just don’t think that is very credible, because clearly Xi Jinping would like China to continue on this trajectory of economic growth," UC San Diego's Victor Shih, who studies Chinese economic policy, says in The New Yorker.

The International Monetary Fund sent up a warning flare on U.S.-China trade. "While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019," IMF economists Eugenio Cerutti, Gita Gopinath and Adil Mohommad write in a blog post.

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